Study: label litigation has produced an innovation “wasteland”

Former music startup founders charge that the labels "suck companies dry."

Everyone knows the story of Napster, the peer-to-peer file-sharing service that was shut down by the major labels a decade ago. The destruction of Napster pushed peer-to-peer file sharing underground, leading to the rise of Grokster, the Pirate Bay, Megaupload, and dozens of other services that facilitate illicit file sharing. It may also have created a larger market for licensed services such as iTunes.

But a new Google-funded study argues that the destruction of Napster and the litigation campaign that followed it had deeper and more far-reaching implications than is commonly appreciated. The author, Rutgers-Camden law professor Michael Carrier, conducted interviews with dozens of senior executives who were working at music labels, venture capital firms, and music-related startups during the Napster era.

Many of them argued that the labels' aggressive litigation campaign against Napster and other early music startups created a venture capital "wasteland," with music-related startups unable to raise money. The result, Carrier concludes, has been a stunted pace of innovation that continues to this day.

The Recording Industry Association of American disputed Carrier's findings. "The fundamental mistake that this study, and other pieces like it, make is to assume that the only type innovation is technological," the organization said. The firms the labels sued a decade ago were "not innocent 'innovators,'" the group wrote. "Most unlicensed p2p services were very well aware that what they were doing was probably illegal, and they were deliberately architecting their software to be able to avoid knowledge."

A scorched-earth campaign

The emergence of Napster was a shock for the major labels, which had grown fat on two decades of rapid growth in CD sales. Many of them "saw the Internet as a fad." So it was a rude awakening to discover that millions of their former customers suddenly had the ability to share label music with one another at negligible cost.

The labels responded harshly, suing Napster and eventually driving the firm into bankruptcy. And Napster wasn't the only target. Around the same time, the labels also sued cloud music pioneer MP3.com. It would sue numerous music startups during the aughts.

Defending against copyright litigation can be tremendously expensive. Two people told Carrier that defending a lawsuit by a major label cost $150,000 to $200,000 per month. That's enough money that many startups would go bankrupt even if they ultimately prevailed in court.

And the intimidation tactics reportedly went beyond suing startups. The labels also threatened to file personal lawsuits against the officers and major investors of music startups.

"They suck companies dry"

The executives Carrier talked to said the labels made life miserable even for startups that tried to follow the rules.

One executive tells of a startup with millions of users that was sued by the labels. The firm told the labels "You guys made your point; we will charge anything you want to charge, and you can take any percentage you want to take." But the labels reportedly responded, "No, we want you to turn it off."

Indeed, some respondents charged that the labels treated lawsuits against music startups as a short-term revenue source. The labels "sat in meetings with digital startups and tried to take as much money as they could. They knew their business model was not going to work, that this was not recurrent revenue." But bleeding music startups dry helped the labels hit their quarterly revenue targets.

A venture capitalist reported that the labels insisted on signing short-term deals, one or two years at a time, that could be renegotiated if the startup was more profitable than expected. "As soon as the companies are profitable, they suck companies dry," the VC said.

CD protectionism

This seems short-sighted. Online piracy wasn't going away, and the failure to provide consumers with access to the music they wanted in convenient online formats surely drove some customers over to the dark side. So why did the labels pursue such an aggressive strategy?

One factor was the adamant opposition of brick-and-mortar retailers to online distribution. At the time that Napster burst onto the scene, retailers like Walmart and Tower Records were the labels' primary revenue source. Indeed, some interviewees argued that the labels treated these retailers, not individual fans, as their primary customers. Major retailers had substantial leverage over record labels because they decided whose products would be prominently featured in stores. And they insisted that music not be made available online at prices that would undercut the market for CDs.

The labels were also reluctant to undercut the market for physical CDs because they had billions of dollars invested in infrastructure for creating and distributing CDs. One label reportedly "spent a billion dollars on trucks to distribute their CDs." That investment would be wasted if the industry shifted toward low-cost digital downloads.

The labels' obsession with preserving the market for CDs led to unrealistic expectations for digital services. For example, before iTunes established the 99-cent price point for music singles, one label was "adamant" that "the single should be priced at $3.25." That was high enough that a customer who bought "two or three" singles would replace the revenue from selling a full album.

Carrier also charges that the labels were excessively focused on short-term profits. Executives' bonuses were based on quarterly profits. Nobody got a bonus for making a long-term investment that wouldn't pay off for a few years. Hence, they were more inclined to view the startups they were negotiating with as short-term sources of cash rather than long-term business partners.

The RIAA responds

The RIAA is not impressed with Carrier's study, and the organization shared with Ars a draft of a forthcoming response. It characterizes it as "wild speculation based on various assumptions, anonymous musings, and no real metrics," and as a vehicle to communicate the author's "biased views of the industry and clear preference for venture capital investment over protecting the arts."

The industry group argued that lawsuits were essential to allowing labels and artists to claim a share of the revenues from online music consumption. "Finding for Napster would have instantly granted every online service the right to copy and distribute (or at least facilitate such action) without any permission or license, and there would have been absolutely no incentive for Napster to negotiate for them," the RIAA said.

The RIAA also disputed the premise that litigation has diminished venture capital investment, though here it focused more on the 2005 Grokster decision than on the Napster case. "The legal digital music market grew from less than $200 million in 2004 to more than $3 billion in 2011," the association said. "After a unanimous Supreme Court ruling against Grokster, venture capital investment grew for Media and Entertainment to 7.1 percent of total VC dollars from just 4.6 percent before Grokster."

Finally, the industry group argued that some of the stories told in the study are "bogus." For example, Carrier pointed to a PC World article claiming that the major labels had sought $75 trillion in damages against LimeWire, "a figure higher than the Gross Domestic Product of the world." But as Mike Masnick of Techdirt, no friend of the RIAA, pointed out, there doesn't seem to be any credible evidence for the $75 trillion figure. The case was eventually settled for $105 million.

The RIAA has a point in at least one respect: given Carrier's methodology, it's worth taking the study with a large grain of salt. It's not a surprise that entrepreneurs and venture capitalists who locked horns with the recording industry in court a decade ago would be willing to badmouth the industry today. Virtually all the quotes are anonymous, and it's not clear if their claims were independently fact-checked.

Still, the study does point to some serious problems with the recording industry's litigation strategy. The fact that litigation costs have forced startups into bankruptcy after winning in court is a cause for concern. And the uncertainty of the law, along with the threat of statutory damages as high as $150,000 per work, makes it more difficult than it should be for businesses to stand up to industry bullying. The industry's litigation campaign really does seem to have hindered innovation, even if the situation is not as dire as depicted by the RIAA's worst critics.

Update: After this story went live, Carrier sent Ars the following statement:

Yes, they're correct about the Limewire claim. That, as well as the Britney Spears quote about piracy were not correct. Many folks flagged that for me, and I have already taken those points out of the next draft.

Many of the respondents were more than willing to give their names, but I decided it would be better to have all quotes anonymous. To make sure the quotes were accurate, I sent to all 31 the list of quotes I planned to use. 28 said that my quotes were fine as is or offered some minor suggestions to make them more accurate. The final 3 never responded, but the Wisconsin Law Review will be reviewing these to make sure they're all accurate.

The interviewees also included many folks from the labels, who said things very similar to what the innovators said.

89 Reader Comments

The people that would be best poised to help the industry, to point other people to legal sources, tend to actively dislike the industry because of it's tactics and methods. Not to mention shitty sound engineering and largely asstastic "talent".

That's not true at all. Our own Executive branch is more or less lined up around the block the fellate the RIAA and MPAA at every opportunity. They've been very helpful to the industry.

It's not just the Dems either. It's the GOP too. It always fascinates me when some conservative congressman or senator from one of the flyover states shills for Hollywood. In any other context, they would be attacking the popular media for it's depravity.

This seems similar to how internet companies haven't had to charge sales tax. It gave them a small advantage that led to a lot of innovation, even it is kind of skirting the law. In Canada, I think they've always had to charge sales tax, because the tax is uniform across each province, and my feeling is that this has really stunted innovation. Amazon.ca has finally started selling more than just books, but it and everything else is still rather primitive.

All this legal onslaught on all things new media related that is not centered around distributing traditional media content in way analog to traditional media business is going to become a really big problem for user generated content.

Technically it is getting really cheap to produce, manage, process and distribute content of almost any size, regardless if 10 or 10M people want to receive it. The tech will only get cheaper still until the cost both per work and per copy is negligible. The only thing that can rise the cost per unique work is policy and law. If presenting user generated content without checking it by hand first becomes to dangerous it will cease to be cheap and therefore not worthwhile if it won't have many thousands of receivers, that is back to the traditional way. Would make internet a sad cable tv/shoping mall hybrid.

In the end I does not matter if it was a coordinated effort with a specific goal or just people trying to protect their own turf using the means they know. The result will/would still be very sad.

I urge all consumers to buy direct from the musical artist if possible.

+1The Artist Responds:1.Best to have my fans write to me and Order Direct2.Also good to allow my Art to be sold online without letting Big Label/RIAA near it.I will get a better percentage of the Sale thru INDIE Companies than I would thru any Major Outlet

Musicians are not exactly luddites in my experience. Maybe not 50yo musicians, but 20-40yo do tend to have a cluex4 about how to sell themselves online.

Not the 50 year old musicians either. 20 years ago when I was doing the music scene thing half the lead guitarist's rigs looked like the console of a space craft and the back was a spaghetti of home-rigged wiring harnesses and connectors, and I've seen plenty of home-baked effects processors.

If you want an indication of how far this need for control goes back, then the the book Last night a DJ saved my life is a good read. Its slanted more towards how these things impacted DJs and dance music but it shows that desire to control the medium all the way to back to the earliest days of the phonograph. You might have thought these battles were a somewhat new phenomenon, but no... think mid / late 1800's...

The book Free Culture is a variation on that from the perspective of society. And it's free.

If you want an indication of how far this need for control goes back, then the the book Last night a DJ saved my life is a good read. Its slanted more towards how these things impacted DJs and dance music but it shows that desire to control the medium all the way to back to the earliest days of the phonograph. You might have thought these battles were a somewhat new phenomenon, but no... think mid / late 1800's...

The book Free Culture is a variation on that from the perspective of society. And it's free.

Thanks for the tip, I will take a look for it...

IIRC it makes several excellent arguments for why Disney should be banished. Err, I mean for why copyright should be relatively short.

Doesn't piracy take away millions of jobs from decent people each year?

Probably world wide, but they probably also count each time a dev company shuffles staff depending on what project they are doing at the time.

I'm pretty sure it's in North America only. Like the dry cleaner down the street closed and he used to clean suits for a guy who worked for a delivery service who worked for the RIAA. The dry cleaner closed down due to piracy. It's all Napster's fault.

In a similar way to how MPAA claims that movie piracy leads to less cinema going, that again leads to less popcorn sales, that again means that corn farmers get less demand for their produce.

Actually, and off topic I know, but corn is a guaranteed sale, period. Government subsidies guarantee farmers get paid for corn. They actually had to conduct studies to find new ways of using it because of this. It is why almost every single product in the supermarket is sweetened with high fructose corn syrup.

Doesn't make sense to attack RIAA. They and the labels they represent are all about selling CDs (and before that, vinyls). We need a new breed of music publishers who can take the premier music talent of our times and directly channel all this talent via the Internet for our listening pleasure (and dollars).

Its too bad the music industry samples much of the young talent by means of "contests" like American Idol, where they find the best of the best and then entice these young new artists with 6 figure signing bonuses and then before the artists knows it, they are being represented by the RIAA and the like and have very little control of their own art and careers.

This seems similar to how internet companies haven't had to charge sales tax. It gave them a small advantage that led to a lot of innovation, even it is kind of skirting the law. In Canada, I think they've always had to charge sales tax, because the tax is uniform across each province, and my feeling is that this has really stunted innovation. Amazon.ca has finally started selling more than just books, but it and everything else is still rather primitive.

I dont know if you are from Canada, but its a whole different ball game up here. Many more factors are in play in the music industry. Much more regulation, much of it good, but not all. For example, our radio stations are required by law to have a certain percentage of the broadcasts be Canadian artists. It takes away the stations control of what they play when, which is a tool they use to generate income. Due to being forced to play a certain amount of Canadian music, they ONLY play Canadian music from established artists that are guaranteed to be able to generate listeners and therefore income. So, all we hear is Shania Twain and Bare Naked Ladies and other major artists and very little indy music gets airtime. Also, the tax was not uniform over all provinces until very very recently with the introduction of our new HST(harmonized sales tax) which brought the provinces all in liner with each other. Previous to that, we had GST(general sales tax) which was federal and all provinces charged it and then each province, for the most part, had its own form of provincial sales tax. In Ontario, GST was 7% and and PST 8% IIRC. In other provinces they might only be 7 and 4 or 7 and 5 or whatever that province had legislated. HST only went into effect maybe a year ago and it is our conservatives that introduced the legislation.

Doesn't make sense to attack RIAA. They and the labels they represent are all about selling CDs (and before that, vinyls). We need a new breed of music publishers who can take the premier music talent of our times and directly channel all this talent via the Internet for our listening pleasure (and dollars).

This is exactly what we need no more commercial music period. If ITunes has taught us and the music industry anything is new business models are always superior. Don't worry about that single sales has come no where close to making up for the death of album sales.

Doesn't make sense to attack RIAA. They and the labels they represent are all about selling CDs (and before that, vinyls). We need a new breed of music publishers who can take the premier music talent of our times and directly channel all this talent via the Internet for our listening pleasure (and dollars).

This is exactly what we need no more commercial music period. If ITunes has taught us and the music industry anything is new business models are always superior. Don't worry about that single sales has come no where close to making up for the death of album sales.

Yeah, being less profitable than when there was illegal price fixing price than in a model that labels had to be dragged kicking and screaming into, embedding much the public into other methods prices that the model is inferior, not that the riaa is a luddite scourge on society.

Piracy doesn't affect as much as you guys think it does. Every person I have met who used torrents is poor. If they can't get it from torrents they just don't get it. Also these people who get movies and music introduce their friends to the new song or movie, but rarely say anything about how they got it. So if their friend likes it they will buy it from a store nearby.

To torrent requires a bit more knowledge then the average low life can adsorb. You will get quite a few bad files which will make your PC sick. Anyone who is torrenting will have to get their PC fixed or know how to fix it. They are complaining about less than 3% of the population.

Those Hollywood jerks screw over the artist, but their company gets paid for a track long after the artist is dead. Or they sue you.

At this point piracy has been greatly reduced. Majority of the major sites are dead or busted. I got netflix, and last.fm. Getting legit content has become so much easier than torrenting.

Hollywood is destroying jobs by killing start ups. The economy is unaffected otherwise.

Grimby wrote:

ZippyDSMlee wrote:

Grimby wrote:

Doesn't piracy take away millions of jobs from decent people each year?

Probably world wide, but they probably also count each time a dev company shuffles staff depending on what project they are doing at the time.

I'm pretty sure it's in North America only. Like the dry cleaner down the street closed and he used to clean suits for a guy who worked for a delivery service who worked for the RIAA. The dry cleaner closed down due to piracy. It's all Napster's fault.

I'm pretty sure it's in North America only. Like the dry cleaner down the street closed and he used to clean suits for a guy who worked for a delivery service who worked for the RIAA. The dry cleaner closed down due to piracy. It's all Napster's fault.

Where's Kevin Bacon in all that?

We may have defeated the six degrees.

Wait! Maybe not...

"...worked for a delivery service who worked for the RIAA who was working with Kevin Bacon's bands The Bacon Brothers distributor"

RIAA... facepalm. Their idea of innovation was to kill off already-overpriced CD singles in favor of forcing people to buy full $20 CDs with one popular track, and devices like Sony's Network Walkman which changed your mp3's to their crappy proprietary DRM'd format as it slowly copied to your device.

Doesn't piracy take away millions of jobs from decent people each year?

Probably world wide, but they probably also count each time a dev company shuffles staff depending on what project they are doing at the time.

I'm pretty sure it's in North America only. Like the dry cleaner down the street closed and he used to clean suits for a guy who worked for a delivery service who worked for the RIAA. The dry cleaner closed down due to piracy. It's all Napster's fault.

In a similar way to how MPAA claims that movie piracy leads to less cinema going, that again leads to less popcorn sales, that again means that corn farmers get less demand for their produce.

Actually, and off topic I know, but corn is a guaranteed sale, period. Government subsidies guarantee farmers get paid for corn. They actually had to conduct studies to find new ways of using it because of this. It is why almost every single product in the supermarket is sweetened with high fructose corn syrup.

you can forget about napster, pirate bay, etc, and just talk about mp3.com. That company was doing a 100% legal operation. they had hundreds of thousands of user-generated songs, and they also had a thing where you could listen to your own CDs online as long as you proved you owned the CD. this, IIRC, is exactly what Apple and other companies are doing now. but back in the mp3.com days, they got sued, and ALL OF THE CONTENT WAS DELETED. everything. just vanished. all of the music that people had created themselves and uploaded for others, all of the playlists that had been curated, all of the relationships and the social network that was building, all of it, just erased in a flash.

that is what the essence of the 'old guard' of the old music industry was about. you can read an interesting story somewhere about a kid who went to work at one of those 'music distribution by mail' companies, and how he painstakingly wrote endless notes for the catalog about scores of indie bands. and then he met the guy who owned the company. the guy didn't care about music, at all. it was all just money to him.

i dont support piracy but the old 'industry' was the biggest pirate of all. i miss record stores but i dont miss any of the rest of it.

Doesn't make sense to attack RIAA. They and the labels they represent are all about selling CDs (and before that, vinyls). We need a new breed of music publishers who can take the premier music talent of our times and directly channel all this talent via the Internet for our listening pleasure (and dollars).

This is exactly what we need no more commercial music period. If ITunes has taught us and the music industry anything is new business models are always superior. Don't worry about that single sales has come no where close to making up for the death of album sales.

The thing is that being less profitable isn't a problem. Business models change, people adapt.

The thing is, RIAA show a graph showing profits in one year being down from a previous year. The thing is, it's still profit, nobody lost money. Losing profit isn't losing money. Losing money is, well losing money. If I expect to get a return of $100 on my investment, and only get $50, I haven't lost money, I still have more money than I had before.

So as long as they are making a profit, they cannot complain.

Oh, and if things are so bad, why are they one of the strongest industries in the USA? And why did the head of the RIAA (I think, it might have been a publisher/label) get a massive pay bonus?

The thing is, RIAA show a graph showing profits in one year being down from a previous year. The thing is, it's still profit, nobody lost money. Losing profit isn't losing money. Losing money is, well losing money. If I expect to get a return of $100 on my investment, and only get $50, I haven't lost money, I still have more money than I had before.

So as long as they are making a profit, they cannot complain.

Oh, and if things are so bad, why are they one of the strongest industries in the USA? And why did the head of the RIAA (I think, it might have been a publisher/label) get a massive pay bonus?

Based on how the modern financial world looks at it, you are looking at it all wrong. You talk like someone's grand pappy with this nonsense about measuring health based on being in the black.

If you're not growing, you're dying. That's the view point used by big money. 30% profitability is poor performance if last year you were also 30% profitable. Further, if year over year sales are same, even if you're more profitable, people will cast aspersions about your financial health.

The thing is, RIAA show a graph showing profits in one year being down from a previous year. The thing is, it's still profit, nobody lost money. Losing profit isn't losing money. Losing money is, well losing money. If I expect to get a return of $100 on my investment, and only get $50, I haven't lost money, I still have more money than I had before.

So as long as they are making a profit, they cannot complain.

Oh, and if things are so bad, why are they one of the strongest industries in the USA? And why did the head of the RIAA (I think, it might have been a publisher/label) get a massive pay bonus?

Based on how the modern financial world looks at it, you are looking at it all wrong. You talk like someone's grand pappy with this nonsense about measuring health based on being in the black.

If you're not growing, you're dying. That's the view point used by big money. 30% profitability is poor performance if last year you were also 30% profitable. Further, if year over year sales are same, even if you're more profitable, people will cast aspersions about your financial health.

That doesn't sound particularly sustainable... Eventually you'll run into a wall somewhere and stop increasing profitability.

Being profitable is growth however, since, assuming that you are doing your accounting correctly, profit is money you don't need (as in revenue-expenses, expenses including all salaries), and that means you can use that money to grow.

Continual acceleration isn't sustainable anywhere else, so why should be OK in business? Natural competition will eventually rule that there is no way for a company to grow any further, it is simply not possible.

Though history suggests that this is what actually happens, companies keep growing until they are too large to support themselves and collapse, becoming smaller companies hauling themselves out of the old corpse.

If modern finance looks at the world this way, then it is doing something wrong. They are looking at acceleration and thinking it's velocity, its like looking a car and saying it's standing still because it hasn't gotten faster. It might not be getting to it's destination any faster, but it is still progressing.

I wonder if start-ups are part of this, profit-growth is a major part of start-up health because they aren't always self-sustaining at low profits, hence requiring injections of cash to kick-start them. If the investors are still thinking in that way (which is possible), then they could be fooled into thinking that profit-growth is always a valid metric.

It's silly though, sure, if a child stops growing, you get concerned, it's supposed to grow, but if an adult stops growing, that's normal, if an adult starts shrinking that is also cause for concern.

I don't know much about big-business finance, being as I am stuck in start-up land (it's fun though, like a theme park), but any system which measures health based on how much /more/ of a finite resource you are using it clearly flawed. I'm all for promoting increased profits and all that, but surely "profitable" should be healthy, "Increased profits" should be improving health and "decreased profits" should be declining health. That seems like a more sustainable metric to me.

I don't care if I'm old-fashioned in my views about finance, if <puts on old-man voice> these new-fangled financial ideas are the reason for this current mess, I'd rather be old-fashioned thankyouverymuch.</oldmanvoice>.

I know exactly how to solve the problem. Stop buying music. All of the world, just say NO. Don't buy any music recording that is NOT made by the artist or his personally held company. That cuts the RIAA out of the picture entirely. They can't get paid when nothing is coming in the door.

You can still go to concerts. The money there goes to the artists' corporate structure and the contract with the arena or venue, not the RIAA. If the artist is smart he'll have CDs he's made for sale at the concert that don't have to be reported to the RIAA.

Artists can disconnect from the RIAA but the price is that they will no longer collect any checks for playbacks for anything previously released. That's what is holding them back. Technology hasn't completely eliminated the RIAA but its close.

I'm already down to 3 or 4 new CDs bought a year. I don't buy iTunes (that's another issue). I don't pirate anything, mp3s or movies. I listen to the radio but that's beginning to be pointless, nothing new but trash on now. Lyrics a 6 year old could write. Singers that could not survive without Autotune. Tunes that seem to only come out of beat boxes. More foul language than I care to listen to.

I buy music from musician's websites. I try to buy only music that appears on their own labels not some big money-grubbing conglomerate. At least the musician is getting a better cut of the profits.

Based on how the modern financial world looks at it, you are looking at it all wrong. You talk like someone's grand pappy with this nonsense about measuring health based on being in the black.

If you're not growing, you're dying. That's the view point used by big money. 30% profitability is poor performance if last year you were also 30% profitable. Further, if year over year sales are same, even if you're more profitable, people will cast aspersions about your financial health.

Recent events seem to suggest that the modern financial world often has an unrealistic policy. Also, what you speak of is more from the perspective of potential investors, particular those interested in trying to make day to day profits, as opposed to those investing for something like retirement, whose primary concern would be trying to get a good long-term return that at the very least, beats the rate of inflation (which in reality means just not losing value). However, you don't need to worry about pleasing investors if you don't really need investors anymore because your business is self-sustained.

The stupidity of the music industry executives was plain to see back in the end of the 90’s and even more so today. The can say whatever they want now, but everyone that’s passed 30 can remember how they fought tough and nail against any form of music digitalization insuring that they have absolutely no place in nowadays online distribution.

The music business is pretty tough for a young startup without initial funding. I have yet to find a good business model for my free, open source music player. Something that could at least make it pay its own costs.

Biggest issue is how hard it is to get music. You need to get licenses and get deals with copyright holders. The only solution I found was to go to YouTube and SoundCloud to access free music for users.

I wish more people would jump on the idea of being able to send money to artists without the labels taking a cut. With all the talk about how bad labels are and how people wish they could support their favorite artists, you know. Today labels take over 90% of all the revenue. The artist/band gets around 9%. Add to that the bad (but getting better) royalty rates of stuff like Spotify.

Stupid labels. Don't they know real innovation means letting someone else take what they have the legal right too and what they paid to produce and give it away for free.

Surely you can't expect someone to innovate by giving away the music *they* bought rights to.

Actually, I find it darkly amusing that the implicit model of most of these 'innovators' is "do it our vastly less profitable way or we'll steal it for free" and yet its the label that get called the MAFIAA...

However, you can't get around what's obvious in most of these discussions. People feel if they don't like the price, then they're entitled to steal other people's work. (Unless it's their work, in which case it's completely immoral and people should go to jail.)

If you want an indication of how far this need for control goes back, then the the book Last night a DJ saved my life is a good read. Its slanted more towards how these things impacted DJs and dance music but it shows that desire to control the medium all the way to back to the earliest days of the phonograph. You might have thought these battles were a somewhat new phenomenon, but no... think mid / late 1800's...

The book Free Culture is a variation on that from the perspective of society. And it's free.

Thanks for the tip, I will take a look for it...

IIRC it makes several excellent arguments for why Disney should be banished. Err, I mean for why copyright should be relatively short.

I saw it recommended here in the past so I finally checked it out. Good read. Now I'll have to read the one mentioned above to see it from the perspective of an artist that actually has to deal with it.

Before the internet the labels had a monopoly. If you made good music and wanted it to be heard, then you had to go through a label.. You couldn't just walk down to your local HMV with a bunch of CDs under your arm.

With the internet labels become less needed. Anyone can make music, put it online and if it is good enough, you can get a return. All without labels taking a cut.

Sure, this model has not taken off yet, but let's face it, artists tend not to be the most tech savvy people. Give it another 10 years.

Or, to put it another way, before the Internet, artists whose music was in demand largely got paid for their efforts. Sure, they may have received a small chunk of the pie and many of them got royally screwed over, but they got some pie.

Before the internet the labels had a monopoly. If you made good music and wanted it to be heard, then you had to go through a label.. You couldn't just walk down to your local HMV with a bunch of CDs under your arm.

With the internet labels become less needed. Anyone can make music, put it online and if it is good enough, you can get a return. All without labels taking a cut.

Sure, this model has not taken off yet, but let's face it, artists tend not to be the most tech savvy people. Give it another 10 years.

Or, to put it another way, before the Internet, artists whose music was in demand largely got paid for their efforts. Sure, they may have received a small chunk of the pie and many of them got royally screwed over, but they got some pie.

But in, say, ten years time this might magically fix itself as people start paying for what they currently get for free.

Is that a reasonable summary? Or have I missed something?

Seems the line between "100% fuck-all" and full compensation is the ratio between the honest and and dishonest. As long as the number of honest paying customers equals a livelihood, then the impact of piracy will remain in the shadows. This what I've talked about in the past about us raising a generation on the entitlement mentality. It alters over time the ratio towards the dishonest. It also teaches other lessons that aren't good in the long term for a societies survival. Piracy is a symptom of a bigger illness.

"The industry group argued that lawsuits were essential to allowing labels and artists to claim a share of the revenues from online music consumption."

This is utterly untrue. In the music business artists under contract to major studios end up owing huge sums to the label. Unless a massive hit ensues they remain in debt to the label and see no share of revenues. The same model applies in the film business, where filmmakers surrender all their rights ("including the inalienable right of authorship") to the studio and see nothing in return.

Timothy B. Lee / Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times.